Litigating California Wage & Hour and Labor Code Class Actions

was a “discharge” triggering application of Section 203, but the California Supreme
Court reversed.
In Smith v. Superior Court, 200 the plaintiff worked a one-day assignment as a hair
model for L’Oreal, for which she earned $500. The employer, pursuant to its regular
practice, did not pay her until sixty days after the model shoot ended. 201 If the
delayed payments violated Labor Code Section 203 as to every hair model L’Oreal
paid in a similar fashion in California, potential liability would have amounted to
$15,000 per model per assignment (thirty working days of penalty pay times $500 per
day), which could quickly add up to millions of dollars. If the end of the assignment
was not a “discharge,” however, then the employee would be limited solely to suing
for payment of the wages, interest, and any attorney’s fees accrued in bringing the
suit. 202
The California Supreme Court ruled that the end of the one-day assignment resulted
in a “discharge” of the employee. The court explained that the term “discharge” was
ambiguous: it could mean either “fire” or “release from one’s obligations.” When
someone has an assignment of a fixed term or performs a fixed task, the employer
“discharges” (i.e., releases) the employee at the end of the term or completion of the
task. The California Supreme Court analyzed the legislative history and concluded
that this interpretation—”discharge” as synonymous with “release from one’s
obligations”—was more consistent with the overall purpose of the statute and the
strong public policy for immediate payment underlying Section 203. Accordingly, the
end of a fixed-term assignment that ends the employment relationship between the
employer and employee triggers the obligation for immediate payment under Labor
Code Sections 201-203.
2. Temporary Employment Agencies
In 2006, a slew of class actions were filed against temporary agencies, arguing that
the end of every temporary assignment is a “discharge” that triggers the right to
immediate payment and the application of waiting time penalties. Temporary
agencies typically do not pay wages on the date a given assignment ends, but rather
send paychecks in regular one or two-week intervals (except in the rare case where
the agency “fires” the temporary employee by giving notice that the temp will not be
considered for further work).
200
201
202
123 Cal. App. 4th 128 (2004) (single-plaintiff case).
The employer erroneously treated its models as independent contractors. If the employer lacked a reasonable basis for
that position, that could qualify as a “willful” violation sufficient to trigger waiting time penalties.
Lab. Code § 218.5 (attorney’s fees recoverable); Lab. Code § 218.6 (pre-judgment interest recoverable from the date
payment was owed).
Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 48